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Funding opportunities for startups and technology commercialization through TDB

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A major hurdle faced by most of the entrepreneurs is lack of access to funding. This session will focus on how to get access to quality funding and funding avenues available to agri-startups. It will …

A major hurdle faced by most of the entrepreneurs is lack of access to funding. This session will focus on how to get access to quality funding and funding avenues available to agri-startups. It will discuss the modalities involved in obtaining funding assistance, more specifically, on understanding what a potential investor looks for in an agribusiness venture.

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  • 1. FUNDING OPPORTNITIES FOR STARTUPSAND TECHNOLOGY COMMERCIALISATION TECHNOLOGY DEVELOPMENT BOARD (DEPARTMENT OF SCIENCE & TECHNOLOGY) GOVT. OF INDIA VISHWAKARMA BHAWAN New Delhi – 110016 Dr. P S RAJU Website : www.tdb.gov.in www.tdbindia.org
  • 2. MINISTRY OF SCIENCE AND TECHNOLOGY Government of India Shri Vilasrao Deshmukh Shri Ashwani Kumar Honble Minister for Ministry of Honble Minister of State for Ministry of Science & Technology, Science & Technology, Ministry of Earth Sciences and Ministry of Earth Sciences, Ministry of Ministry of Parliamentary Affairs Planning & Ministry of Parliamentary AffairsDepartment of Department of Science Scientific & Industrial Department of& Technology Research Biotechnology (Dr. S K Brahamchari , Secretary ) (Dr. M.K.Bhan Secretary)Dr. T. Ramasami, Secretary) Labs CSIR CEL, NRDC R&D LabsTDB & NSTEDB TIFAC Shri H.K. Mittal Secretary
  • 3. TECHNOLOGY DEVELOPMENT BOARD A statutory body under Department of Science & Technology, Govt. of India, established on 1st September 1996 by the Parliament under TDB Act 1995. A unique financial institution which deals with Financing of Technology Projects.
  • 4. CHALLENGES IN COMMERCIALIZATION OFINNOVATIVE TECHNOLOGIES• Development & commercialization needs to be done concurrently• High Risk• Difficult to appraise the viability• Difficult to get finance from FIs/ Banks• Commercialization is relatively costly
  • 5. Challenges in Commercialization Long gestation periods; Cut-throat competition, Commercialization is relatively costly and difficult Complex Regulatory procedures Development & commercialization needs to be done concurrently Difficult to get finance from conventional Financial institutions/Banks High Risk Knowledge and R&D Intensive Difficult to appraise the viability
  • 6. TDB Mandate Technology Financingi) Accelerating the Development and Commercialization of Indigenous Technology.ii) Adapting Imported Technology for Wider Domestic Application Joint Financing with Venture Capital Seed Support System for Start-up Collaboration with International Technology Oriented Organization.
  • 7. Source of Funds The R&D Cess that is being collected by the Government of India from the import of technologies has been put into a fund called the Technology Development and Application Fund(TDAF). It was managed by IDBI till 1996. TDB , since 1996, manages this fund. TDB got Rs. 500 crore from R&D Cess.
  • 8. Accessing the Fund Loan*- 50% of cost of project Equity- 25% of cost of project Grant- Only in limited cases with national priority* The current rate of interest applicable is 5% per annum (simple interest). In addition a royalty is also charged on the products developed under TDB project. The repayment is due after completion of the project and after one year moratorium.
  • 9. Who can be fundedCommercial enterprises ;Start-up companies (excluding sole entrepreneur/ sole proprietorship concerns).Source of technologyNational Laboratories In-house R&D unit of a company recognized by DSIR Individuals holding IPR Adaptation of imported technology to wider domestic applicationsFor Agriculture & Food Processing, IT and Designing & developing Special Engineering Machinery (above condition relaxed).
  • 10. Support is not available for Refinancing Basic Research Establishment of new R&D centres Mere creation of technical infrastructure Travel, Conferences, Workshops etc. unless they form part of project approved by TDB Writing of books, reports unless they are essential component of Board approved project More than 2 projects at a time to an industrial concern An industrial concern that is sick
  • 11. Life Cycle of an application for funding  Submission of proposal  Internal screening  Evaluation of project  Signing of loan agreement  Project monitoring  Completion of project  Repayment of TDB loan
  • 12. Flow Chart of Activities Submission of proposal Not recommended Internal Screening Rejection of by DST experts(ISC) proposal Recommended Evaluation By eminent External experts & site visit(PEC) Not recommended Recommended Not recommended Examination by sub-committee of Board Rejection of Clearance by Chairperson TDB Not recommended proposalRecommended Clearance by Board Not recommended Recommended Signing Loan Agreement (Release of 1st installment) Contd. On next page
  • 13. Flow Chart of Activities Contd. from previous page Signing Loan Agreement(Release of 1st installment) Project Monitoring for release of subsequent installments(PMC) Project Completion / Commercial launch Repayment of loan
  • 14. Partnership with TDB Health & Medical Road Transport Air Transport Engineering Chemicals Energy and Waste Utilization Information & Communication Technologies Agriculture
  • 15. TDB FUNDED ENTERPRISES Biocon Limited  Samtel Colour Ltd.  Vimta Labs Ltd. Shantha Biotechnics  Selco International  Bharat Biotech Ltd. Bharat Biotech  Biovet Pvt. Ltd.  Eicher Motors Ltd. Ranbaxy Limited  Sequent Scientific  Reva Electric Car AV Alloys Limited  Realtime Systems Co. Ltd Picopeta Simputers  indswift Ltd. .  Radiant Cables Ravindranath GE Pvt. Ltd.  Tata Motors Ltd. Medical (P) Ltd.  Microtrol Ltd.  CSIR Legend Tech Pvt  OmniActive Health Ltd Technologies (P) Ltd.
  • 16. Joint Financing with Venture CapitalTDB has participated in venture capital investments with: S.No. Fund Fund Size TDB’s contribution (in Cr) (in Cr) 1. UTI-ITVUS (2000-01) 103.00 25.00 2. APIDC-VCL (Biotech Fund (Co- 100.00 30.00 Investment ) (2004-05) 3. UTI-AIF (2004-05) 300.00 75.00 4. Ventureast TeNet Fund II 60.00 15.00 (2006-07) 5. GVFL (2007-08) 250.00 15.00 6. RVCF (2008-09) 100.00 15.00 Total 683.00 175.00 TOTAL:- Rs.175.00 crores
  • 17. Break-up of TDB InvestmentsThe following table indicates the modes of financial assistance provided by TDB till 31st March 2010 Instruments Sanctioned Disbursement by TDB by TDBLoans 750.30 646.67Equity 25.71 24.36Grant 101.01 85.66Venture Funds 175.00 133.76 Total 1052.02 890.45
  • 18. State-wise presence of TDB Investment Andhra Pradesh 31% Karnataka 18% Maharashtra 13% Tamil Nadu 7% Madhya Pradesh 7% Delhi 6% West Bengal 5% Other states <1% TDB has its presence in 16 states
  • 19. Industry-Academia-Institute Partnerships with TDB National Labs 19% (21.3%)Indl. R&Dunits 50% Overseas(49.2%) 4% (5.2%) Tech. Provd. TDB Funding Individuals 14% (10.5%) Govt. Dept. 7% (10%) Acad. Institutions 6% (3.8%) Technology providers: 218; Funds committed by TDB:Rs. 996.21crores
  • 20. Pro-Active RolesIt encourages industries and R&D institutions for product innovation or improvisation of socially relevant and profitable technologies that suit the Indian market; technology to be goal-oriented, socially relevant and profitable.It identifies the areas that requires strategic interventions.The Board encourages new ideas from small enterprises even at the risk of failures.
  • 21. Seed Support System for Start-up TDB initiated the Seed Support System for Start- up in Incubators (STEP/ TBI) administered by DST in 2005-06 to provide early stage financial assistance to the young entrepreneur in bringing out innovative technology venture ideas to fruition The Scheme provides Rs. 100 lakhs (0.2million US Dollar) grant to the Incubator (STEP/ TBI) recognized by DST over a period of three years.
  • 22. Objectives of SchemeThe objective of the Seed Support Scheme (SSS) is to equip the incubators (STEP/TBI’s) with the early stage financial assistance to be provided to deserving ideas / technologies.This would enable the innovative ideas/ technologies to graduate to a level where they can then be fit for seeking normal lending through TDB/FI’s route in their way to the successful commercialization process.This assistance is positioned to act as a bridge between development and commercialization of the technologies.
  • 23. Seed Capital Scheme • TDB provides grants of Rs 1 crore to TBI / STEP managers. • Grant to be used as Seed Capital (Loan and / or Equity) • Beneficiaries: in house Tech start up companies. • Transparent Framework • Flexibilities of Terms
  • 24. Seed Capital Scheme Policy  Maximum grant by TDB : Rs one crore to the Corpus.  TBIs/ STEPs must have  for in-house tech start ups,  physical infra and common facilities for them,  Access to knowledge, mentoring,  Access to Tech services,  Manpower / expertise to manage,Fifth Round Call to TBI / STEP managers : Last date July 31, 2011 more…… www.tdb.gov.in
  • 25. Seed Capital Scheme Policy  Minm: Rs 1 lakh, Maxm Rs 25 lakhs,  Assistance as seed capital and not as Term / WC financing.  Project Management Committee as the top Policy and approval body,  No Lien Project Bank Account.  Proper legal structure.Fifth Round Call to TBI / STEP managers : Last date July 31, 2011 more…… www.tdb.gov.in
  • 26. Features of the SchemeThis is meant for early stage funding for indigenous ideas and technologies requiring up- scaling and related work.This will also be open for the tenants of other Incubators (STEP / TBI)This is considered as a means of sowing the seeds of ideas and converting young potential entrepreneurs as future clients of TDB and not as a means of assured financial return.
  • 27. Broad Areas To Be CoveredThe start-up would be supported primarily on  Product Development  Testing and trials  Test Marketing  Mentoring  Professional consultancy (to attract Professors of institutions to work with small firms)  Any other area as deemed necessary and recommended by the selection committee of STEP/TBI’s.
  • 28. Seed Support for Start-ups in IncubatorsTDB has provided financial assistance of Rs. 5.00 crore ( 1 million USDollar) to five STEPs / TBIs in first and second round during 2005-06 &2007-08.  JSSATE – STEP, Noida  VIT- TBI, Vellore  CIIE – IIM, Ahmedabad  TREC-STEP, Tiruchirappalli  SINE – IIT, Bombay  PSG- STEP, Coimbatore  SJCE- STEP, Mysore  TBI- KEC, Perundurai, Erode  SIDBI Innovation and Incubation Centre, IIT Kanpur  ICRISAT, Pantancheru, Hyderabad Support is given over a period of three years .
  • 29. Collaboration with International Technology Oriented Organizations TDB has signed MOU with the following organizations to promote, assist and fund the development of joint technology corporation/ transfer projects and for supporting SME growth via technology transfer, industrial research, technology development & innovation for the purpose of generating economic benefits . MOU with Agence Nationale De Valorisation de la Recherché (ANVAR), France. Centre for the Development of Industrial Technology (CDTI), Spain. Commonwealth Business Council (CBC), U.K.
  • 30. ACHIEVEMENTS OF TDB 15 years of rich experience in funding commercialization of new technologies and handholding with enterprises. So far, TDB has signed 270 agreements with total outlay of Rs. 3500 crore and TDB assistance of over Rs. 100 crore. Projects are spread over 16 states and almost in all the industry segments. TDB has emerged as a major promoter of first generation technopreneurs. First Generation Technopreneurs need more managerial support and handholding.
  • 31. National AwardsEvery year 11th May is celebrated as ‘NationalTechnology Day in India to forge powerfulpartnerships of industry with the nationallaboratories and to create knowledge networks withacademic institutions to promote research anddevelopment and to gain entry into global markets.
  • 32. National Award to a SSI unit for successful technology The Technology Development Board also provides a cash award of Rs. 2.00 lakh to be given to a Small Scale Industry (SSI) that has successfully commercialized a product based on indigenous technology.
  • 33. THANKS
  • 34. Life Cycle of an application for funding  Submission of proposal  Internal screening  Evaluation of project  Signing of loan agreement  Project monitoring  Completion of project  Repayment of TDB loan
  • 35. Flow Chart of Activities Submission of proposal Not recommended Internal Screening Rejection of by DST experts(ISC) proposal Recommended Evaluation By eminent External experts Not recommended & site visit(PEC) Recommended Examination by Not recommended sub-committee of Board Rejection ofClearance by Chairperson Not recommended proposal TDBRecommended Clearance by Board Not recommended Recommended Signing Loan Agreement (Release of 1st installment) Contd. On next page
  • 36. Flow Chart of Activities Contd. from previous page Signing Loan Agreement(Release of 1st installment) Project Monitoringfor release of subsequent installments(PMC) Project Completion / Commercial launch Repayment of loan

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